For purchasing personnel, knowing the ex-factory price of purchased products can help you or your company get the most cost-effective products in purchasing. And because the company has a new development direction or different order requirements from the past, you may need to contact some new products. So in this case, how to quickly grasp the ex-factory price of new products and take over the procurement? You can start from the following aspects:
- Understand product raw materials
Knowing the raw materials of the product is the first step to understand the product. After familiarizing with the raw materials of the product, you can also have a deeper understanding of the characteristics and advantages of the product, and you can be more comfortable in the process of negotiating with the supplier. In the process of understanding product raw materials, you need to pay attention to the following points:
1.1 Differences in the characteristics of raw materials
Generally speaking, the same product uses different raw materials due to different applications. Each raw material has its own physical and chemical properties, usage characteristics, and safety. Some raw materials have very different properties, so you need to be familiar with and distinguish.
1.2 Differences in the value of raw materials
Knowing the price of raw materials is the first step to mastering the ex-factory price of the product. It is closely related to the final price of the product, and sometimes determines whether the company can produce products of the corresponding grade and the market value of the final product of the company. And raw materials due to differences in characteristics, prices will also vary. Since our ultimate goal is to grasp the ex-factory price of the product, in the process of understanding the raw materials of the product, you need to focus on understanding the prices of raw materials and the differences between them.
1.3 Raw material price fluctuations
Maybe you have encountered this situation: due to changes in the price of raw materials, the prices of the products you purchase have also increased accordingly, and the products ultimately sold by the company have also increased in market value. A series of changes are caused by raw materials, I believe you also understand the importance of choosing raw materials with stable prices. But sometimes, due to business/order demand, it is necessary to choose raw materials whose prices are not stable. What should we do? There is a more commonly used method: the agreed price benchmark. That is to agree with the supplier on a relatively stable raw material price benchmark, and add or subtract from this price benchmark when it is delivered. - Understand the product manufacturing process
When you want to know the ex-factory price of a product, in addition to knowing the price of raw materials, you also need to know the production cost of the product. The manufacturing process of the product affects the production cost of the product. You can start with production technology and process, quality control points and pass rate, minimum order quantity and packaging quantity.
2.1 Production technology and process
To understand the manufacturing process of a product, you must first understand the production technology and process of the product, which is also the most important part of the manufacturing process. The more sophisticated the production equipment, the more advanced the production technology, and the more complex the production process, the higher the processing cost of the product. But understanding the production equipment is usually time-consuming, you can get a rough understanding of a part, and focus on understanding the production technology and process of the product. Generally, the complexity of these two parts can already determine whether the processing cost is high or low.
2.2 Quality control points and pass rate
Quality control and product qualification rate are largely determined by the production technology and process of the product. When the production technology and process of a certain product are too complicated, it is conceivable that its quality control points will be more and the pass rate will be lower. When there are too many quality control points and the pass rate is too low, it means that the cost of producing enough qualified products will be high.
2.3 MOQ
MOQs exist mainly because suppliers want to make orders more production-friendly. During the production process, the equipment will incur wear and tear costs, and the staff will incur staff costs, which will affect the final MOQ size. Therefore, the MOQ is also affected by the production technology and process of the product to a certain extent, and it is also affected by the quality control and pass rate.
2.4 Understand the scope/function of the product
Many products are powerful and have many uses, and the feature requirements of the product may change in different uses. Different feature requirements also mean that the manufacturing process of the product will also change to a certain extent. Therefore, you need to understand not only the scope or function of the product, but also how the manufacturing process of the product will change for different applications. - Understand business needs
To understand a product, it is necessary not only to understand its basic information, but also to understand the needs of the enterprise for the product.
Sometimes companies need standard parts. In this case, you only need to understand the price of raw materials and production costs as mentioned above. In the end, the ex-factory price of the product you infer is basically very small from the real price.
But sometimes, enterprises need customized parts, and an important factor that distinguishes customized parts from standard parts is the mold. The production of customized parts generally requires the production of molds in advance, and the cost of molds is also high and low. When you want to master the ex-factory price of customized parts, it is also necessary to understand the cost of mold making.
